Analytical Framework, Concepts, Definitions, and Classifications

Purpose: Turkey being in a process of development and having an ever changing socio-economic structure, the consumption expenditure patterns and income levels of the individuals and the households are determined through the “Household Budget Surveys“ for various socio-economic sectors and regions.

With information about consumption expenditures obtained from Household Budget Survey it is aimed to; to determine the items to be included in consumer price indices and the base year weights; to monitor the changes of households’ consumption patterns within the time; to compile the data which will help in forecasting private final consumption expenditures used in the national income calculation; to obtain required data for the determination of poverty line and other socio-economic analysis; to obtain necessary information to enable the minimum wage to be determined according to recent conditions.

History: The early surveys covering whole Turkey were carried out in 1987 and 1994. Turkish Statistical Institution (TurkStat) has launched annual regular surveys since 2002. 2002 Household Budget Survey was conducted on a total of monthly 800 and annually 9 600 sample households. 2003 Household Budget Survey was conducted on a total of monthly 2 160 and annually 25 920 sample households for a year period between 1 January and 31 December 2003. 2004-2008 Household Budget Surveys were conducted on a total of monthly 720 and annually 8 640 sample households. The sample size was increased to 1 296 households monthly, 15 552 households yearly since 2009 because of using non-response correction method instead of substitution of sample households.

Definitions:

Household: The community which is comprised of one or more than one members living in the same dwelling either with blood relationship or not and meet their needs together such as housing, food etc. and participating the services and management of the household.

Member of household: Each member of the community forming the household. Additionally, those who are doing military service or in jail, old people in aged homes, university students in the dormitories, guests (no matter how long they stay in the house) and those who leave the house permanently due to marriage, military or employment conditions are not included as the members of the households.

Consumption expenditure: It is the average of monthly consumption expenditures of households and consisting of the following components;

Purchase: Acquiring any good or service in return of a definite payment. The purchases done by households for their own needs in the survey month have been included.

Consumption from own production: Consuming the goods (in the produced or processed form) obtained from household’s own production by the household itself For instance, the consumption of milk produced by the household either as milk or cheese.

Consumption from income in-kind: Households’ consumption of the goods and services produced or sold in the work place of the household members who are currently working is accepted as consumption from income in-kind. For instance, the allowances of food, clothing etc. provided for a member who is a paid employee is accepted as the consumption from the in-kind income of the employee, whereas if the household member working at his own place or as employer brings some of the products that he/she produces or sells at his work place to home for consumption purposes, this is accepted as consumption from income in kind.

Goods and services that are purchased by the household to be given to the private persons or bodies as gifts or allowances: It covers the value of goods and services that are purchased by the members of the household to be given (as gift or allowance) to the private persons or bodies during the survey month.

Durable goods: The monthly average value of expenditures on durable goods purchased by household during the last year is included in consumption expenditures.

Imputed rent: The rent amount of the dwelling in which the household lives as the land owner, or public housing and other (those who live in the dwellings of their father, relative etc. and pay a very low amount of rent or live rent-free). The imputed rent is included in the consumption expenditure. The imputed rent amount is determined by taking the rent amount of a dwelling which has similar features and is rented in the same district or settlement, as precedent.

Unrecorded expenditures: Expenditures of household members related to their economic activity and non-consumption expenditures and investments are not covered.

Classification: COICOP/HBS had been used until 2015 and new version of COICOP (v.2011) has been used since 2015 to classify the consumption expenditures of households.

International and regional guidelines: “Household Budget Surveys in the EU: Methodology and Recommendations for Harmonization, 2003” book has been used as a base in determination of questionnaires and survey methodology by considering our country conditions.

Scope of the Data

Coverage: All members of the households living within the borders of the Republic of Turkey were included within the scope. However institutionalized population and the immigrant population (because of practical reasons) were excluded.

Geographical coverage: All of the settlements within the borders of the Republic of Turkey were included within the scope. Settlements were grouped as follows;

i) Urban Areas: Settlements with a population of 20 001 and above, ii) Rural Areas: Settlements with a population of 20 000 and below.

Coverage of consumption expenditures and income: Consumption expenditures cover the purchases in the survey month, consumption of own production, consumption from in-kind income and transfers, purchases by the household to be given as a present/support and monthly average value of expenditures made in the last year on some durable goods and infrequent expenditures like car, white goods, computer, television, camera, furniture, whitewash, private school or courses, etc. Income covers the data on the all kinds of disposable income obtained during the last 12 months by household’s members.

· Main variables: Three groups of variables have been obtained from the survey:

Variables of consumption expenditures: Type of expenditure and the total monthly expenditure value at the level of sub-spending group.

Variables of household composition, employment and income status: Variables regarding the household members' age, gender, education level, employment status and incomes from last one year.

2.Variables of consumption expenditures: Type of expenditure and value of total monthly expenditure by sub-groups of expenditure.

3.Variables of household composition, employment and income status: Variables related to individuals’ age group, gender, educational background, employment status (occupation, economic activity, status at work etc.), business and non-business net incomes in the survey month and during last year.

Accounting Conventions

Conversion to unit of account: -

Valuation: Consumption expenditures of households have been calculated in Turkish Lira as monthly averages.

Sampling unit: Household live at the address is defined as the final sampling unit.

Selection of sample unit: Blocks were selected by the probability proportional to size sampling (pps) from the blocks formed from National Address Database. The final sample units, households, are selected from each selected block systematically.

Weighting: Weighing is a method used to obtain parameters from the data set resulting from sampling so as to represent the universe. Results of the household budget survey have been weighted and published by the most recent population projections. Until year 2009 aforesaid population projections was calculated based on the general population censuses. In 2007 Address Based Population Registration System (ABPRS) was established. There are some differences in the distribution of population by age, sex and regions in ABPRS compared to the censuses. Accordingly the new population projections were produced using the most recent population data obtained from this new system. National and regional population projections were renewed. The weights based on new population projections have been used beginning from 2007 Household Budget Survey. And the population weights were calculated considering non-responses since 2009 Household Budget Survey.

Characteristics of Basic Data Sources

Sources of data: Data on consumption expenditures and income are obtained by face-to-face interview with members of households and by diaries that households record their daily expenditures during a survey month.

Type of data collection: Household information has been compiled by interview, registration and observation methods. Each interviewer has recorded the data on consumption expenditures and income of 6 sample households monthly on average as a result of 6 times of visit per household.

Prior to the survey month, the information about the socio-economic status of the households is obtained in the first visit to the sample households and how to fill the book of record is explained. During the visits in the survey month, consumption expenditures of the sample household on food, clothing, health, transportation, communication, education, culture, entertainment, housing, furniture etc. are obtained through the books of record and interviewing method. Information about employment status, economic activities, occupation, status at work and household members' net income received during the last 12 months has been compiled in the last interview at the end of the survey month.

Basis of country data: Household budget survey is being conducted to compile data on household income, socio-economic status and consumption structure in accordance with decree no. 5429 dated 18.11.2005 and also declarations of households have been used.

Compilation Practices

Processing system: The survey has been implemented by using CAPI system at the first and the last interviews, diary keeping and data entry methods have been used at the other interviews.

Processing site: SAS has been used in analyzing & controlling of data.

Timing of recording transactions: The month when households are surveyed.

Revisions

For the statistics produced in the scope of this press release, revision is not foreseen in the current year. Any future revision shall be publicly announced.

Other subjects

Seasonal adjustment: Data are not seasonally adjusted.

Geographic detail: The estimation level of 2002 Household Budget Survey is whole Turkey at urban and rural breakdown. The estimation level of 2003 Household Budget Survey is whole Turkey at urban and rural discrimination and 12 regions at NUTS level I with urban and rural breakdown and 26 regions at NUTS level II. It would be possible to have estimates at whole Turkey and urban and rural discrimination by using yearly survey data since 2004.

Beginning from 2014, Household Budget Survey’s sampling design and frame were based on the new administrative division which is valid from 2014 under the law called "The Law of Establishment of Greater Municipality in Thirteen Provinces and Twenty-Six District Municipality”.

Until the conclusion of the studies on the new definitions of urban and rural areas, the results will only be given as whole Turkey on consumption expenditure. Estimations for urban and rural areas will not be released.

It would be possible to have proportional estimates on expenditure at regional level by combining current year's data and previous two years' data beginning from 2004.

Defining household groups in quintiles:

Quintiles ordered by disposable household income:Total disposable household incomes received in the last year by all of the households interviewed have been inflated and drawn to the end of the year in order to make the income include a different reference period for each month and make all the incomes comparable. Afterwards, the annual disposable incomes of the households are listed from the least amount to the most and quintiles were formed by dividing the number of the households in 5 equal parts. Thus the share of each group in the expenditures has been calculated.Quintiles ordered by household consumption expenditure: Monthly consumption expenditure values of the households are listed from the least amount to the most within a month and quintiles are formed by dividing the households in 5 equal parts. Thus the share of each group in the expenditures has been calculated.

Since the quintiles are formed separately for urban and rural settlements and each level of settlements is listed independently, values for Turkey cannot be obtained from the total of the urban and rural values. The household quintiles are formed and sub-features of these groups are calculated separately.